Sugar industry reacts after farm bill’s defeat

Published: Friday, June 21, 2013 at 10:04 p.m.

Last Modified: Friday, June 21, 2013 at 10:04 p.m.

Louisiana sugar cane farmers are keeping a close eye on what might happen to the $500 billion farm bill batted down by the U.S. House of Representatives Thursday.

The bill controls the sugar industry’s price-control system that local industry representatives say is vital to keeping American sugar growers competitive.

Now its future is unclear. The Senate had earlier passed a version of the bill that kept sugar price-control protections.

“Everyone is just scratching their heads right now,” said American Sugar Cane League General Manager Jim Simon. “It is kind of early in the game to figure out what the next step will be.”

Simon said it’s likely House leadership and Agriculture Committee representatives will meet to try to pick up the pieces, but it’s too early to speculate on if a retooled bill will progress.

The sugar industry’s price control system is guaranteed to be in place for the coming crop ,and Simon said it’s possible the system could be extended.

Last year, Congress also failed to pass the five-year farm bill but extended its provisions for one year.

“What concerns me, just like any other business, we have to borrow money. And when you go to the bank they want to know what the situation is more than just one year ahead,” said Wallace Ellender, who grows sugar in Lafourche and Terrebonne.

The managers of Lafourche’s two sugar-processing mills could not be reached Friday.

“Well cane unlike other products has roots in the ground for three to four years. It affects planting decisions. ... We just like to have that stability to do business,” said Greg Gravois, a sugar can farmer from St. James Parish.

The bill’s passage was in question for reasons beyond controversial sugar price controls. It includes money for the federal government’s Supplemental Nutrition Assistance Program or food stamps.

The House version would have cut SNAP by $2 billion annually. Republicans felt that wasn’t enough.

Democrats, including President Barack Obama, felt it cut too much.

While the SNAP provisions are the most hotly debated, the sugar price provisions are also the subject of controversy, Simon said.

Sugar producers benefit from a combination of import controls and a protective loan program.

Opponents say the program blocks less expensive foreign sugar that would bring down local prices.

Industry representatives say the program is the last defense keeping American producers competitive because of subsidies in foreign markets.

“This gives the (U.S. Department of Agriculture) the ability to manage sugar supply in the U.S. so that prices are stabilized. Those provisions create a level playing field so all growers can effectively compete on the world market,” Simon said.

That combined with import caps keeps the price of sugar stable, but opponents note the price is higher than in other countries.

Without the program farmers will be undercut by countries that subsidize sugar, Simon said.

Simon used Brazil as an example. He said the country provides some $3 billion in subsidies per year to their sugar industry.

<p>Louisiana sugar cane farmers are keeping a close eye on what might happen to the $500 billion farm bill batted down by the U.S. House of Representatives Thursday. </p><p>The bill controls the sugar industry's price-control system that local industry representatives say is vital to keeping American sugar growers competitive. </p><p>Now its future is unclear. The Senate had earlier passed a version of the bill that kept sugar price-control protections. </p><p>“Everyone is just scratching their heads right now,” said American Sugar Cane League General Manager Jim Simon. “It is kind of early in the game to figure out what the next step will be.”</p><p>Simon said it's likely House leadership and Agriculture Committee representatives will meet to try to pick up the pieces, but it's too early to speculate on if a retooled bill will progress. </p><p>The sugar industry's price control system is guaranteed to be in place for the coming crop ,and Simon said it's possible the system could be extended. </p><p>Last year, Congress also failed to pass the five-year farm bill but extended its provisions for one year. </p><p>“What concerns me, just like any other business, we have to borrow money. And when you go to the bank they want to know what the situation is more than just one year ahead,” said Wallace Ellender, who grows sugar in Lafourche and Terrebonne. </p><p>The managers of Lafourche's two sugar-processing mills could not be reached Friday. </p><p>“Well cane unlike other products has roots in the ground for three to four years. It affects planting decisions. ... We just like to have that stability to do business,” said Greg Gravois, a sugar can farmer from St. James Parish. </p><p>The bill's passage was in question for reasons beyond controversial sugar price controls. It includes money for the federal government's Supplemental Nutrition Assistance Program or food stamps.</p><p>The House version would have cut SNAP by $2 billion annually. Republicans felt that wasn't enough.</p><p>Democrats, including President Barack Obama, felt it cut too much. </p><p>While the SNAP provisions are the most hotly debated, the sugar price provisions are also the subject of controversy, Simon said. </p><p>Sugar producers benefit from a combination of import controls and a protective loan program. </p><p>Opponents say the program blocks less expensive foreign sugar that would bring down local prices.</p><p>Industry representatives say the program is the last defense keeping American producers competitive because of subsidies in foreign markets. </p><p>“This gives the (U.S. Department of Agriculture) the ability to manage sugar supply in the U.S. so that prices are stabilized. Those provisions create a level playing field so all growers can effectively compete on the world market,” Simon said. </p><p>That combined with import caps keeps the price of sugar stable, but opponents note the price is higher than in other countries. </p><p>Without the program farmers will be undercut by countries that subsidize sugar, Simon said. </p><p>Simon used Brazil as an example. He said the country provides some $3 billion in subsidies per year to their sugar industry.</p>